Tasmania will not pay compensation for Gunns’ licences, Premier says

Tasmanian Premier
David Bartlett
has ruled out the state government paying compensation to Gunns for handing back its native forest timber licences and for roads and infrastructure it has built.

A source close to Gunns said it could receive between $200 million and $250 million for bowing out of native forest logging. The timber company has contracts with state government-backed Forestry Tasmania (formerly called Forestry Commission of Tasmania) for pulpwood until 2027 and for sawlogs from native forests until 2017.

“I can rule that out completely," Mr Bartlett said on Friday after a meeting on Thursday with Prime Minister Julia Gillard.

Mr Bartlett told ABC radio on Friday that much analysis and planning was needed before specific questions of industry restructuring and possible compensation could be considered.

Gunns chief executive Greg L’Estrange said the Premier was getting ahead of himself.

“It will take money to resolve this problem. There are precedents here. I think we need to take this one step at a time," he said.

Any compensation for Gunns is likely to come from the federal government as in similar cases in Queensland and Western Australia.